If Barack Obama wants a model for the President he needs to be between now and November 2012, let him try out John Kennedy. The Catholic from Massachusetts was not my favorite president, but he showed some serious stones when he took on the steel industry, and the entire Republican dominated Wall Street establishment, in 1962.
The story is this. The steel industry was the backbone of the economy. Demand for steel was like demand for oil today. Steel-based products and projectsâ€¦ from cars to the national highway system â€¦ kept the economy humming. A significant increase in costs would bring the economy to a halt. Kennedyâ€™s Labor Secretary Arthur Goldberg helped Big Steel control costs by putting the arm on the steel unions not to demand too much in the way of wages and benefits and managed to get a very reasonable contract that spring. Then U.S. Steel and the four other largest steel producers raised prices about $6 a ton (40 percent).
Kennedy did not dither. He was widely quoted as having remarked: “My father always told me that all businessmen were sons of bitches, but I never believed it until now.” And he attacked the Steel boys on all fronts. Kennnedy mounted his Bully Pulpet and told the people: “The simultaneous and identical actions of United States Steel and other leading steel corporations increasing steel prices by some six dollars a ton constitute a wholly unjustified and irresponsible defiance of the public interest.” Cabinet members called steel company board members, particularly those that had not yet raised prices, to let them know the government cared. And he put the engine of government to work.
The Defense Department reviewed its steel contracts â€¦ which it normally spread evenly across the industryâ€¦ and granted the next three contracts to companies that had not increased prices. The Justice Department initiated an investigation into whether the price increases violated the anti-trust laws.
Kennedy won the battle and saved the economy by getting the prices rolled back. For his trouble, the popular press called him a facist and a commie. No telling how the matter would have played out at the polls in 1964. It is not clear how much Kennedy was actually concerned with the consequences. Hardly a relevant inquiry now. Certainly he knew that saving the economy was a key to getting reelected.
Our current president needs to find the spirit to fight a long battle between now and the election. He needs to show some toughness and take the battle to the enemy. He needs some balls. Kennedy had balls.